Although Freddie had been trained on piano up to Grade 4 (there are 8), the original intent of Queen was to be a power trio, with the piano only used occasionally in the studio. When Seven Seas of Rhye was released, the need to promote it and the fact it was piano based resulted in the band introducing that instrument to their equipment from 1974 onwards. It was optional at first (if the venue had no piano, they simply dropped that song from the set-list) but by the time they began their 1974 tour it became mandatory, as they were promoting the Killer Queen / Flick of the Wrist single (both songs were piano based) and piano was also used for White Queen as well as for the four-song medley and the last number of the set.
Grand pianos are obviously larger and more difficult to move than most other instruments (e.g. drums can be dissembled and taken in parts), and as neither Freddie nor the band as a whole owned one in the early days, they had to ask local promoters and concert organisers to provide Freddie with a piano, which was usually rented or hired from a local supplier or dealer. For special occasions such as the Xmas Eve concert in 1975 at the Hammersmith Odeon or the 18th September 1976 massive gig at Hyde Park, Freddie hired a 7 ft 2 in white Bechstein (possibly a IV model made in the late 19th century), but otherwise he just played what he was given.
That practice ended when he bought a Steinway 8 ft 11.75 in concert grand (1972 model made in New York), which he used for every single concert since he had it: the crew moved it from one city to another in large trucks or loaded it to the plane as freight. The piano was tuned before and after soundcheck and its amplification was based around Helpinstill instead of just placing two microphones on top of the piano was a good solution for concerts as it reduced feedback, because the pick-ups (invented by Ezra Charles Helpinstill) transmitted the sound by sensing string vibration instead of capturing external stimuli (which is what microphones do, and which is great in the studio but for a concert may be unreliable and troublesome).
Now, when did Freddie buy the Steinway? That's a good question ... when he wrote to the Fan Club magazine in late 1977, he commented that while in New York he'd bought a 9 ft piano made in England and with Japanese lacquer finish, and that he'd had it shipped home. That piano is not the Steinway, not only because the Steinway was made in the States, but also because it didn't have a Japanese lacquer finish. Freddie's letter referred to a piano he'd then have in his flat and which can be found in some private photographs.
It seems that he didn't have the Steinway during late 1977, as he used a Bösendorfer for the famous concert in Houston (11th December). The earliest photograph I've been able to find of Freddie playing the Steinway is one taken by Kevin Cummins at the Bingley Hall in Stafford (7th May 1978 - link). It suggests that Freddie most likely bought it (or at least started using it) either before or during the 1978 leg of the News of the World tour. The first mention of the Steinway piano in a Fan Club magazine is from 1979.